What is “extraordinary” cooperation? How is a self-disclosure deemed “immediate”? With a series of new policy changes at the Department of Justice (DOJ) have come requests from the compliance community for more guidance. Don’t expect the agency to budge.
Assistant Attorney General Kenneth Polite Jr. of the DOJ’s Criminal Division reiterated in a speech Thursday the agency will not offer prescriptive guidance regarding how it evaluates corporate compliance programs.
“There is no one-size-fits-all approach,” he said. Instead, he addressed ambiguity around certain terms included among the DOJ’s policy changes by pointing to some of the agency’s recent cases and declinations and advising compliance professionals to “see how [the terms] are applied in future cases.”
“Every case is different, and our prosecutors need flexibility and discretion to apply their judgment in the myriad scenarios that may be presented,” said Polite.
Regarding extraordinary cooperation, “[C]ompanies must go above and beyond the criteria for full cooperation set out in our policies—not just run-of-the-mill or even gold-standard cooperation but truly extraordinary,” said Polite. To this point, he said the DOJ’s $315 million settlement with Swiss technology company ABB in December regarding violations of the Foreign Corrupt Practices Act was “illustrative.”
The settlement saw ABB admit to a scheme from 2014-17 to pay bribes to a South African energy official. ABB entered into a three-year deferred prosecution agreement with the DOJ but did not receive a compliance monitor.
“[W]hen assessing whether remediation has been ‘extraordinary,’ we will consider if the action has been comprehensive, tailored to the causes of the misconduct under investigation as well as other potential wrongdoing, and able to prevent it from recurring.”
Kenneth Polite Jr., Assistant Attorney General, Department of Justice Criminal Division
“The company’s extensive efforts to cooperate with our investigation shed light on what can constitute ‘extraordinary,’” said Polite. “Among other things, the company voluntarily made foreign-based employees available for interviews in the United States and produced relevant documents located outside the U.S. in ways that did not implicate foreign data privacy laws. And to help our prosecutors assess that voluminous evidence, the company collected, analyzed, and organized the information, including by translating certain documents.”
Polite identified root cause analyses, significant investments in compliance, and undergoing structural changes to ensure compliance and legal personnel have “adequate access to corporate decision-makers” among the most effective forms of remediation. But he added, “[R]egardless of the specific acts taken, when assessing whether remediation has been ‘extraordinary,’ we will consider if the action has been comprehensive, tailored to the causes of the misconduct under investigation as well as other potential wrongdoing, and able to prevent it from recurring.
“For that is our ultimate aim: to incentivize companies to invest heavily in designing and implementing effective compliance programs that can deter, prevent, and, if necessary, detect criminal conduct.”
Polite stressed the terms “immediate” and “extraordinary” in the DOJ’s recent revisions “apply only when there are aggravating factors,” he said. “Absent such circumstances, if companies voluntarily self-disclose, fully cooperate with our investigations, and timely and fully remediate, they can rely on a presumption of a declination. This has been, and remains, the case.”
An example of a declination in a case with no aggravating factors came earlier this month, when the DOJ notified Pennsylvania-based Corsa Coal Corp. it would not face prosecution for alleged bribes employees paid to Egypt’s Al Nasr Company for Coke and Chemicals to secure coal supply contracts.
“[E]ven though much has been published recently, do not mistake any one policy or revision as marking a sea change in how the department tackles white collar crime,” said Polite. “Don’t fall victim to recency bias. A new announcement does not mean that we have only begun to focus on an issue or that our prosecutors will place undue attention upon it at the expense of other considerations. … Do not lose sight of the [corporate enforcement policy’s] larger context.”